Over 12,000 farmers in Eldoret have scaled passion fruit farming through contract farming as the demand for processed fruit from Europe and Middle East soars, with processing companies setting shop in the region to woo the farmers.
One such company, Transaction Link international, has already created consistent year round market for farmers who have now switched to full time passion farming. David Ndiema, the executive director of Transaction Link international, said the company has applied for a certificate from the Kenya Investment Authority (KenInvest), which allows for deduction from tax payments of up to 150 per cent of initial capital spent on projects outside Nairobi, Mombasa and Kisumu.
Under the arrangement, the company will establish a commercial nursery where passion fruit seedlings will be cultivated with farmers getting the seedlings from the nursery to grow them in their farms, with the remainder being cultivated and grafted in the factory's farm. "We will get 75 per cent of the financing from Bertuzi Food, a food processing company in Italy and we are also working with MEAF Consultants located at Sameer Park in Nairobi," said Mr Ndiema. "We are processing funding arrangements (for the land) with the Diamond Trust Bank (DTB)," said Mr Ndiema. Machinery for the factory will be sourced from Bertuzi.
To entice farmers to abandon traditional crops like maize and wheat for passion fruit farming, the group plans to roll out free training and payment amounting to double the market price for the pioneer farmers. “Demand is so overwhelming out there that we cant keep up. Soft drink companies are nearing closure in Middle East for example because they are struggling with passion fruit concentrates. Even the exports from other African countries like Ghana and Tanzania is way below what they need,” said Lawrence Koech one of the stakeholders involved in the setting up of the processing factory.
Regional manager at Kenya Investment Authority in Eldoret, Robert Materei, confirmed that KenInvest had received an application for the Sh500 million plant, but a certificate will only be issued after a site visit to the proposed land.
This comes at a time when major soft drink companies are contracting farmers in the region to grow fruits on their behalf as traditionally imported raw materials for making soft drinks like fruit syrup become unbearably expensive.
Only last year Coca-Cola launched a plan to consolidate fruit supply for its East Africa operation by incorporating farmers into its supply chain. That Sh900 million project is set to help selected mango and passion fruit farmers increase productivity, and ensure beverage manufacturer has sustainable supply of the raw materials.
The project, which is being implemented in partnership with the Bill & Melinda Gates Foundation and TechnoServe, will see some 50,000 small-scale farmers in Kenya and Uganda participate in Coca-Cola’s supply chain for the first time.
It anticipates 100,000 metric tons of mango and passion fruits will be produced annually during the four years of implementation. Coca-Cola, which is the world’s biggest buyer of fruits for juice manufacturing, has more than 1,100 juice products across the globe.